NEA releases P794M loan to 38 electric cooperatives

MANILA, Philippines–State-run National Electrification Administration has released a total of P794 million to 38 electric cooperatives in the first 10 months of the year as it targets to make these utilities “operationally strong and viable” given a changing energy landscape.

In a statement issued Thursday, NEA said P25 million of the loans, which were given through its Enhanced Lending Program, were used by four electric coops for the rehabilitation of their damaged distribution system wrought by typhoons Juan, Pedring and Quiel.

Another P161.7 million were given to 15 electric coops to assist them in the reduction of their annual systems loss by at least 1 percent yearly, thus improving the system reliability within their respective franchise areas.

To reduce system loss, electric coops used the loan to purchase/replace power transformers; conduct meter pole clustering; rehabilitate defective lines and replace defective kilowatt-hour (kWh) meters, and install grounding transformers, gas circuit breakers, system power protectors and/or kWh meters.

Eleven other ECs have meanwhile availed of loans worth a total of P194.759 million, which were used as working capital for their operations, including the payment of power accounts to the National Grid Corporation of the Philippines (NGCP), the Philippine Electricity Market Corp. (PEMC) and to the Small Power Utilities Group of state-run National Power Corp. The loan was likewise used for the payment of taxes.

The bulk, or P412.734 million worth of loans, were granted to the electric coops to finance their rural electrification projects, the activities for which included the rehabilitation of distribution lines, upgrading of system, purchase and acquisition of logistics support and construction of office building and facilities.

NEA has been encouraging the ECs to avail of its Enhanced Lending Program since the loans being offered have competitive interest rate at 9 percent annually for for loans to be repaid for more than two years and only 8 percent annually for loans to be paid within a two-year period or less.

Other features of the program also include provision of longer repayment period to as long as five to 10 years; fast processing period; electronic fund transfer; minimum requirements; assistance in the preparation of project feasibility study; and personalized service.

Energy Secretary Jose Rene D. Almendras has since underscored the crucial role of electric cooperatives in ensuring power supply, particularly in the remote, far flung areas in the country.

The NEA board, led by Almendras, earlier approved a package of options that would help “ailing” electric cooperatives (ECs) recover and better serve power consumers in the provinces. These options are expected to help ensure continuous delivery of electric service in their respective coverage areas, according to a memorandum sent to all electric coops.